Former executive prepares for woman's federal prison,

By Katherine Burton October 18, 2011 BusinessWeek

Oct. 18 (Bloomberg) -- Danielle Chiesi won’t need her pearls and stiletto heels for a while. For the next 30 months, it’ll be khakis and work boots.

Chiesi, the 45-year-old femme fatale analyst who pleaded guilty to securities fraud in the biggest U.S. insider-trading case on record, is set to arrive today at Federal Prison Camp Alderson in West Virginia. She’ll be serving time for passing illegal stock tips to hedge-fund manager Raj Rajaratnam, who was sentenced last week to 11 years in federal prison.

Bureau of Prison's FPC Alderson, WV - Entrance

Alderson, nestled in the foothills of the Allegheny Mountains, ranks among the cushiest federal prisons. It’s more college campus than “Chained Heat,” the 1983 exploitation film about women in jail. The red brick, Georgian Revival buildings of Camp Cupcake, as former inmates call Alderson, were modeled after Bucknell University in Lewisburg, Pennsylvania. There are no fences, barbed wire or guard towers. For the 1,166 prisoners, tedium is a bigger threat than violence.

Alderson Federal Prison Camp for Women - No fences or barbed wire - "Camp Cupcake"

Even so, for educated professionals like Chiesi who are used to calling the shots, the prison experience can be devastating, said Herbert Hoelter, head of the nonprofit National Center on Institutions and Alternatives in Baltimore.

“Every decision is made for you -- when you work, when you eat -- it doesn’t vary,” he said. “You feel useless,” added Hoelter, who provided pre-incarceration counseling to white- collar criminals Michael Milken and Ivan Boesky.

The nation’s first women’s prison, Alderson opened in 1927, and counts home-entertainment guru Martha Stewart, singer Billie Holiday and Charles Manson acolyte Lynette “Squeaky” Fromme (who escaped into the woods for two days in 1987 before being recaptured and transferred to another prison) as former inmates.

Alan Kaufman, Chiesi’s lawyer, said his client was “resilient and strong” and prepared to serve her time. Chiesi declined to comment for this article.

“I guess she’s doing as well as anybody can to get ready for it,” Kaufman said in an Oct. 14 interview. “It’s certainly not like your first day at summer camp.”

Prisoners at Alderson live in two, two-story dormitory buildings, broken into four units, called ranges, that each hold about 120 women, said Sam Adams, a public information officer at the prison. Women are assigned in pairs to 8-foot by 10-foot doorless cubicles, or “cubes,” with concrete floors, a bunk bed and two lockers. They share a desk, bulletin board and garbage can. The cinderblock walls rise about seven feet, meaning the woman on the top bunk can see out over the entire room.

BOP-style dormatory setting for a Federal Prison Camp

With no doors and walls, the noise in the ranges is deafening, and even ear plugs (40 cents in the commissary) can’t block it out, said Jennifer Myers, a former inmate who served 14 months at Alderson for marijuana trafficking before being released in 2007.

$290 a Month

Chiesi, a former teenage beauty queen who would show up at technology conferences wearing form-fitting clothes and low-cut tops, will have to make do with a uniform of khaki pants and shirt and steel-toe boots during her stay. The only other clothes allowed -- pajamas, sneakers and athletic clothes like sweatshirts, shorts and t-shirts -- can be bought in the commissary.

The University of Colorado graduate, who appeared at her sentencing in July wearing a light pink sleeveless sheath dress and pearl necklace, solicited inside information from technology industry executives including Robert Moffat, a former International Business Machines Corp. executive with whom she had an intimate relationship. Moffat was sentenced to six months in prison and was released in May.

Alderson inmates can spend up to $290 a month at the prison store on items such as soap, hairspray, snacks, a $44 radio, a reading light and wool to crochet. Most everyone crochets themselves an extra blanket, said former inmates.

Sunbathing Allowed

Rules abound, outlined in the 72-page handbook given to inmates on their first day.

Prisoners are required to wear bras and underwear except when sleeping or showering. They can sunbathe on the lawn during their leisure time, but must wear mid-thigh length shorts and cannot apply tanning lotion to one another.

They can’t roll up sleeves of their t-shirts.

Save for one piece of fruit, they are forbidden from bringing food out of the dining hall.

Inmates can have only five paperback books, five magazines and two newspapers at a time that friends and family order on their behalf. They can be sent a calendar, although the prison may reject it if it is held together with a spiral wire, staples or glue.

Inside the compound, just like in the outside world, the inmates find ways to break the rules, say former prisoners.

Smuggling Food

Women smuggle out food from the cafeteria. They hide sugar packets and crackers in their socks and conceal larger items like eggs under their shirts, said one former inmate who spent four years in Alderson and asked not to be identified to protect her privacy.

Touching among inmates is not allowed, though Myers and the other former inmate say that sexual relationships do take place. Most of the fights that the unnamed prisoner saw were caused by jealous friends or lovers, including one incident when an inmate threw hot coffee at another woman. Serious violence is rare, the two former inmates said, and can result in a transfer to a more secure prison.

Lesser infractions, whether having contraband items, feigning illness to get out of work or missing one of the five daily headcounts, can cause inmates to lose one or more of the 54 days off their sentence they can earn each year for good behavior, said Myers, 43, who lives in San Diego and works as a consultant to criminals about to enter prison. In prison lingo, that’s called getting a “shot.”

No Eavesdropping

Then there are the unwritten rules among inmates. “You don’t touch other people’s belongings. You don’t eavesdrop and you don’t ‘ear hustle,’ or butt into other people’s conversations,” said Myers, who is currently working on a book about her experiences at Alderson.

Even with the noise, the lack of privacy and the overcrowded conditions, most women get along, she said.

“You would be surprised the care that the women have for one another, even when they are from different social classes,” said Myers, a college graduate, who helped out by teaching a Pilates class and by volunteering on suicide watch.

“At a certain point, you bond because everyone has a shared experience,” she said. They might make a special dessert to celebrate a “bunkie’s” birthday and they give each other nicknames, she said. Martha Stewart’s was M. Diddy, according to a 2005 interview she gave in Vanity Fair.

Limited Contact

Memrie Lewis, a friend of Stewart’s interviewed in the Vanity Fair article, said Stewart spent her time reading books and studying Spanish. She was also in charge of decorating the prison for Christmas, with a $50 budget, and read her Christmas cards to the other prisoners.

Contact with the outside world is limited. Conjugal visits are prohibited, and family and friends can see prisoners only Fridays through Mondays and on holidays. There is no Internet access and phone calls are expensive at 23 cents a minute and limited to 300 minutes a month.

For five cents per minute, prisoners can send and receive e-mails through a special prison computer system. All other correspondence is done by hand or on electric typewriters available in the library. (The commissary sells white correction tape).

Food offers little distraction. The meals, primarily chicken-based, are heavy on the starch and light on the vegetables, though the cafeteria does offer an iceberg lettuce salad bar.

Cosmetology in Demand

Former inmate Myers said she survived on tuna bought in the commissary at $1.25 a can. Prisoners do attempt creative cooking with the microwave ovens provided in the ranges, mixing items like Laughing Cow cheese and Snickers bars sold in the store with margarine pilfered from the cafeteria to make cheesecake, she said.

Every inmate must work. New prisoners start out in the dining hall, and can apply for other jobs after three months. The pay is anywhere from 40 cents an hour to $5.25 a month and the tasks range from teacher’s aide for high-school equivalency classes to working in the recreation area to sorting through garbage for recyclables.

Inmates can also apply for limited spots in vocational classes where they can be trained as welders, electricians or cosmetologists -- the most sought-after option.

Getting Along

After the workday ends and the prisoners are counted at 4:15 p.m., they have five hours of leisure time before the final count of the day at 9:15 p.m. The prison offers crafts such as pottery and leatherwork. For the more athletically inclined, there are softball, volleyball and basketball games, and inmates can run or walk on the track. There is a law library, as well as religious services and inmate choirs. The prisoners also put on periodic talent shows.

Chiesi, who was told by a judge in July to seek drug-and- alcohol treatment, may be eligible for the nine-month resident drug program. Drug-law offenders make up about 80 percent to 90 percent of the Alderson population, said Hoelter, the prison consultant. If Chiesi is accepted, she may get as much as six months trimmed from her sentence, said Kaufman, her lawyer.

Chiesi’s skills in charming information out of sources may go a long way in prison, where getting along with other inmates and with guards, and networking for the best jobs, can make or break her time inside, Hoelter and the former inmates said.

‘I Will Survive’

In a July 24, 2008, telephone conversation played during Rajaratnam’s trial, Chiesi told Rajaratnam that she “played” a friend “like a finely tuned piano” after getting a tip that Akamai Technologies Inc. would cut its earnings forecast.

“You did it in such a classy way,” Rajaratnam said in the taped call. “The way you worked the relationship.”

Chiesi, in an earlier interview, said she was confident she’d make it through her time in Alderson.

“I anticipate to survive,” she told a group of reporters outside the courtroom where she was sentenced in July. When asked how she would achieve that, she smiled. “By breathing.”

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